Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I think the best way to build wealth is to spend less than you earn, don't borrow money to buy things that depreciate in value, and to be frugal.
Well said.
When studies have been done of American Millionaires, that is exactly what most have been doing. Very few inherit anything and those who do inherit money, rarely manage to pass that wealth on to their heirs.
I worked hard on my military career to get a pension.
We studied Income taxes and learned tax-planning to stop paying into the income tax system.
We studied budgeting to learn how to best live frugally.
We invested in investment vehicles that use other people's money to gain equity, not my money; and that provide HUGE tax-sheltering.
We studied the methods proven to work by millions of households in America who have made the system work for them, to gain affluence. [as per 'The Millionaire Nextdoor']
By the way I do use investment vehicles which do depreciate.
I use straight-line depreciation every year lowering the cost-basis, which then requires that I spend capital on repairs to maintain the cost-basis. And it all works out to provide greater tax sheltering, lowering my AGI.
So technically, I am sometimes in favour of borrowing money for depreciating investments. So long as: I can get into them with zero-money down, so long as they pay for themselves, so long as they provide tax-sheltering, and so long as someone else is willing to make all monthly payments. In these circumstances, I am fully in favour of borrowing money on depreciating investments.
IMO ... living within one's means and investing are the keys to success.
As long as one defines "wealth" in terms of what you have and "more is never enough", you can never be "wealthy". But what you have is not who you are .... contrary to the outlook of so many people on the "keep up with the Joneses" attitude.
I know too many people on the big bucks income level that are the most unhappy people around. All the toys, all the baubles ... are no substitute for real enjoyment of what the stuff in life that counts is about.
Who isn't rich????...Every day that you have another day of life is a fortune...And, every day is another opportunity to get what you want or what you need...You never strike out in life...Everyday is another shot at the ball...You just gotta get up at the plate and take your best swing...Sometimes you're in a slump...But, if you keep getting up to the plate, and keep your eye on the ball, eventually you will start getting some good hits...
I never used to think that I was rich. Ever. Even with a very high salary and more amazing bonus packages, I was always highly aware of the vast discrepancies between me and the partners/execs of the partnerships/corporations I've worked for.
It wasn't jealousy, mind you, I just knew how much they were earning and subconsciously wrote them off as "rich" because it was so much more in raw salary alone (not even factoring stock options) than what anyone else was making.
Until very recently, that was how I thought. And now I have friends going bankrupt with all their debt, struggling to raise families, praying they never get sick because health insurance (even the best available) sucks, etc etc etc, on and on and on.
I realized that, if something were to happen to my health (god forbid), it wouldn't matter because I don't actually have to work. My home is paid for. I live in the middle of a giant metropolis so I can get around as a handicap. I don't even have to touch my savings. I formerly thought of myself as "upper middle class" but a lot of my ignorance concerning how the vast majority of people actually live (including those in very high paying professions!) has been dispelled recently. I guess that I am rich.
I never used to think that I was rich. Ever. Even with a very high salary and more amazing bonus packages, I was always highly aware of the vast discrepancies between me and the partners/execs of the partnerships/corporations I've worked for.
It wasn't jealousy, mind you, I just knew how much they were earning and subconsciously wrote them off as "rich" because it was so much more in raw salary alone (not even factoring stock options) than what anyone else was making.
Until very recently, that was how I thought. And now I have friends going bankrupt with all their debt, struggling to raise families, praying they never get sick because health insurance (even the best available) sucks, etc etc etc, on and on and on.
I realized that, if something were to happen to my health (god forbid), it wouldn't matter because I don't actually have to work. My home is paid for. I live in the middle of a giant metropolis so I can get around as a handicap. I don't even have to touch my savings. I formerly thought of myself as "upper middle class" but a lot of my ignorance concerning how the vast majority of people actually live (including those in very high paying professions!) has been dispelled recently. I guess that I am rich.
Well said.
Over the years, I have done taxes for a number of folk, including relatives. Some of them bring in a low six figures a year. And I have usually been amazed at how they have no Net Worth. It is generally all for show. Lose their executive job and in a month their on the street. They bring in HUGE amounts of money, and yet they rack up tonnes of debt. The newest cars, the biggest homes, a large selection of expensive suits, and the trips! But it is all for hob-knobbing with other execs.
Right now my SIL, does all that and more. She visits us to go 'slumming' with her poor relatives. She has my annual gross income in her checking account. However, I retired in my forties. I own my farm. I own all of our vehicles. We have no CC debt, and I own an apartment building.
Over the years, I have done taxes for a number of folk, including relatives. Some of them bring in a low six figures a year. And I have usually been amazed at how they have no Net Worth. It is generally all for show. Lose their executive job and in a month their on the street. They bring in HUGE amounts of money, and yet they rack up tonnes of debt. The newest cars, the biggest homes, a large selection of expensive suits, and the trips! But it is all for hob-knobbing with other execs.
Right now my SIL, does all that and more. She visits us to go 'slumming' with her poor relatives. She has my annual gross income in her checking account. However, I retired in my forties. I own my farm. I own all of our vehicles. We have no CC debt, and I own an apartment building.
So who is 'rich'?
ha! Good for you. I'm so content to own my own apartment. Again, prices here in Chicago are bound to fall dramatically soon enough, so I might upgrade and then start renting this place out for additional investment/savings revenue.
I think what's galling is that I pay more in just federal taxes alone than any two middle class families are likely to earn, and I still find life to be prohibitively expensive. I have no idea how people find the debtors to give them money to live otherwise.
...
I think what's galling is that I pay more in just federal taxes alone than any two middle class families are likely to earn, and I still find life to be prohibitively expensive. I have no idea how people find the debtors to give them money to live otherwise.
Maybe you should consider taking a course of two on itemizing your taxes, and tax-planning.
I often think that most of the US is rich and just does not know it... we have freedoms, heath, food & housing more than most humans have for the history of the race.
As far as money goes it probably takes more than most think to be 'rich'. Once upon a time people thought a million made you rich but today it takes quite a bit more... one million invested conservatively may get you 7% annually over the long haul but back out 3% inflation and you have an annual income of $40,000... is that rich?
I have my health, family, happiness along with adequate income to live a middle class existence so I consider myself rich.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
